* Fed tapering talk may gain momentum if payroll data strong
* Wall Street shares tumble on weak earnings
* Surprise ECB rate cut hits euro but fails to boost shares
* US headline GDP beats expectations
* DAX, FTSE seen down as much as 0.5 pct, CAC 0.4 pct
By Hideyuki Sano
TOKYO, Nov 8 Asian shares slumped to a four-week
low on Friday after Wall Street suffered its biggest fall in
more than two months, as investors looked to the U.S. payrolls
data for clues on when the Federal Reserve will scale back its
The euro fell 0.2 percent after Standard and Poor's
downgraded its credit rating on France's sovereign debt to AA
The single currency fell to as low as $1.3389, though
it still kept some distance from a seven-week low of $1.3295 hit
on Thursday after the European Central Bank's surprise rate cut.
European shares were expected to follow suit, a day after
they failed to sustain gains sparked by the ECB easing and weak
earnings saw the Dow Jones slide 1.0 percent and the
Standard & Poor's 500 Index 1.3 percent.
Germany's DAX and Britain's FTSE are both
seen falling as much as 0.5 percent, while and France's CAC
may fall 0.4 percent.
Data showing China's exports rose more than expected in
October hardly eased investors' cautious mood, with the CSI300
of the leading Shanghai and Shenzhen A-share listings
falling to two-month lows.
MSCI's broadest index of Asia-Pacific shares outside Japan
fell 0.5 percent and looked set for a loss of
1.7 percent on the week, while Japan's Nikkei average
dropped 0.9 percent. Both indexes hit their lowest levels in
about four weeks.
Global shares could face more pressure if the U.S. jobs
report due at 1230 GMT shows that economic damage from a
16-day-long government shutdown last month was limited, fanning
expectations of a reduction in the Federal Reserve's stimulus.
Economists forecast 125,000 jobs were created in October,
slowing from 148,000 jobs in September.
"If we see job growth of around 200,000, then the markets
will surely start to think about tapering in December," said a
senior prop trader at a major Japanese bank.
Data on Thursday showed U.S. growth accelerated to 2.8
percent in July-September, well above economists' forecast of
2.0 percent growth. However, the data also showed that consumer
spending growth was the slowest in two years and inventory
increases accounted for much of the gains.
Still, the dollar strengthened on the U.S. data, with the
dollar's index against a basket of major currencies hitting an
eight-week high of 81.46 on Thursday. It last stood at 80.85
Some emerging-market currencies have been under pressure in
the past two weeks as investors interpreted the Fed's policy
statement at its latest meeting on Oct. 29-30 as less dovish
than they had anticipated.
Brazil's real, the South African rand and the
Chilean peso all hit two-month lows against the dollar
on Thursday, although their Asian peers fared a bit better.
The dollar's strength suppressed oil prices, with Brent
crude hitting a four-month low of $103.22 a barrel.
Plentiful crude supplies, progress in talks over Iran's disputed
nuclear programme and fall in China's crude imports all weighed
on the prices.
U.S. Treasuries maintained gains made after the ECB's rate
cut, with the 10-year bond yield standing at 2.60 percent
, near this week's low.
While talk of tapering the Fed's stimulus is negative for
bonds, the latest talking point in the bond sphere was research
papers by Fed officials that make the case for promising to hold
interest rates lower for longer.
The papers, published at a time when Fed Vice Chair Janet
Yellen is preparing to succeed Ben Bernanke, are seen as a
crucial guide to Yellen's thinking on monetary policy.
"Some Fed officials are keen not to expand its balance
sheet. So the Fed could start reducing bond buying but it could
instead reinforce its forward guidance," said Arihiro Nagata,
chief of foreign bond trading at Sumitomo Mitsui Banking Corp.